I do not expect much to happen in the FED meeting this week other than a possible hint at hiking rates sometimes in the near future. One must however be prepared for the inevitable as a trader. In case there is a rate hike, the US dollar will sharply gain in value against all major counters. However this strength will be short lived in my opinion, 2 to 10 days at the most.
The main focus this week is the Greek drama, which is equally important for both the Greeks as well as Euro Zone. Greece if decides to exit the Euro zone, will be isolated from the Euro zone. In addition there are concerns that China, Russia and such other ambitious emerging global powers will try to enter Greece and help it in what ever they can to further their own interests. US might also look at this as an opportunity to further its own interests in Europe. So there are geopolitical issues with the Greek default as well. Then of-course the markets are already nervous and a Greek default will affect a fragile recovery which is more difficult for Europe then for the US. Mr. Alex Tsipras knows this and is using it to his advantage.
I foresee good sense to prevail and with German and French expertise in keeping the Euro Zone intact the likelihood is that an agreement will be reached for a timely solution of the Greek Debt issue.
Overall i would see this as a Euro favorable week. I would expect the Euro to strengthen further. I continue to see USD/YEN as a good sell opportunity. GBP/USD and EUR/USD good buys as well.
Its worth risking on buying gold as well. Crude might take a little more time to give direction.
